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Cross perishable effect on optimal inventory preservation control

Ya Yang, Huihui Chi, Ou Tang, Wei Zhou and Tijun Fan

European Journal of Operational Research, 2019, vol. 276, issue 3, 998-1012

Abstract: It is very common that retailers are storing and managing perishables of multiple types together. Due to chemical or biological reactions, the preservation period of some perishables (e.g., vegetables, fruits, fish, meats) either prolongs or shortens with the co-storage of other product types. Although this phenomenon is significant, it has not been mentioned in the perishable inventory literature. Therefore in this research, we first introduce the concept of cross-perishability. We then formulate an inventory model with a novel control variable of preservation effort that in turn affects the preservation period with cross-perishability when multiple product-types coexist. With an Internet of Things (IoT) sensor system as the background, this model takes the advantage of real time data, based on which the cross perishable effect, inventory characteristics and control policy can be analyzed. Our results indicate that an integrated decision making mechanism with consideration of the cross perishable effect should lead to an improved global mixed perishable inventory policy, in terms of reducing the deterioration cost, decreasing the inventory level, and improving the perishables quality. We prove the upper and lower bound conditions for the decision variables and utilize this result to facilitate the searching algorithm for a fast convergence to the feasible global optima for the non-linear problem with multiple product types and cross perishable effects. In conclusion, we offer managerial and policy implication for the perishable inventory system where the cross perishable effect should be seriously considered.

Keywords: (D) OR in agriculture; Cross-perishability; IoT-enabled decision process; Adaptive perishable inventory management (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:eee:ejores:v:276:y:2019:i:3:p:998-1012